So there are no middlemen. No need for negotiations. And Tesla doesn’t lose money on commission either. The disadvantage of this model is that for Tesla, this increases their costs. They need to have their delivery centres. Hire staff there, carry out maintenance. Train the staff. The other car companies do not have to bear these costs. But the advantage is that Tesla has total control of the process from start to end.
You can compare this with the Apple company. Apple does the same. Apple tries to control as many things as it can. Whether it is the Operating System, software of the phone, or the chip manufacturing. Tesla’s direct sales method is banned in some US States. Like in Texas. That’s why Tesla can’t legally sell any cars directly in Texas. People living in Texas have to go to other states to buy Tesla cars. Another special thing about Tesla is their giga-factories. The gigantic factories they have established to establish the principle of Economies of Scale.
In economics, there’s a concept Economies of Scale. The larger the scale of production of something, it reduces the cost per unit of it. In electric cars, over several years there was a problem that the cost of batteries was very high. So Tesla introduced the concept of Gigafactories, wherein they set up gigantic factories for manufacturing the batteries for their cars in order to reduce their cost.
Presently, there are 6 Gigafactories worldwide. 4 of them are functional. And 2 under-construction. Apart from these, perhaps the most special thing about Tesla is the technologies that they use in their cars. The type of self-driving technology they’ve used has never been seen before in a car. In their autopilot mode, a driver could drive the car almost without doing anything. The car can drive itself. The safety features in their car are one of the best in the world. The credit to popularise electric cars globally, If you had invested ₹100,000 in Tesla’s stock in December 2019, today, that ₹100,000 would have been around ₹1.5 million.
